EURUSD – Mkt sold the fact yesterday stopping itself begrudgingly back into the short eurusd trade, helped in no small part by comments from the head of eurogroup finance ministers suggesting the Cyprus bailout could be a template for the rest of Europe. Eurusd never looked back once we broke 1.2980 in the ldn afternoon and even had a decent close below the 200 day (1.2880) on its way to the 1.2830 low. Right now seeing some spec buying of eur around the Asia highs, but expect 1.2900/10 to offer decent resistance and that’s backed up by the orderbook which has selling 1.2910-40 topside. Downside 1.2830 then 1.2770 the lvls to watch – orderbook suggests 1.2800-30 should be bought first off
GBPUSD – Undone via the weakness in EURUSD on Monday, and in my opinion, the NY close back below the 1.5200/20 band, negates topside risks for the time being. Some Real Money supply has been evident on this correction back towards 1.5200, and my overall feeling is the client base are generally comfortable selling Pounds again, for the first time since around the 1.5000 mark. Expect good selling interest between 1.5220 and 1.5280, with light buying towards Mondays low of 1.5143.
EURGBP – Within 0.25pcnt of the spike lows seen in Feb. Our early flows today have been skewed towards EUR buying from Corporates, and that is likely to continue around current levels. Any topside correction into the .8490 – .8510 region will be met by Spec and potentially CTA selling. I am square here right now, and would prefer to be short GBPUSD, risking any gains to above Mondays Asian high of 1.5280.
JPY – well the LDN close saw usdjpy run stops 94.00-93.55, mine included, but the move stopped there and with some decent toshin issuance/activities scheduled have been cited as reasons for a nice jump back to a high of 94.46 in Asia. Japanese repatriate flows still dominate the London afternoons and usdjpy suffering the fallout from eurjpy selling post Cyprus. For me key remains we get through Japanese year end on Thursday and then I expect mkt to rebuy usdjpy pushing higher into the BOJ meeting on 4th April – Kuroda will need to deliver however otherwise we will unwind fast. On day I think 93.80 then 93.50 support 94.45/50 should be toppy.
CHF – EUR/CHF holds in firm ahead of good support 1.2185 and as such USD/CHF has rallied largely on the back of EUR supply as Djisselbloem injected the market with various headlines which has given reason to doubt the EU’s approach, helped by a good close below the 200dma at 1.2880 in EUR/USD. Early on in London there has been some profit taking in USD/CHF ahead of resistance at 0.9550/60 which has capped us twice in March.
AUD/CAD/NZD – Never has the word template had such an important impact! The outcome of the Cyprus woes clearly the focus in G10 yesterday and as such EUR and EURxxx the main selling interest. We saw some leverage selling of EURAUD on break of 1.2350 and RM names selling EURCAD through 1.32. All in all I expect this bearish EURxxx sentiment to continue initially but feels like we are back in the grips of what headlines might pop up at any moment and the fact the market is short EURUSD from poor levels. Think therefore in USDcommodity space worth fading extremes, should be interest to sell AUDUSD above 1.0500/30 with 1.06 fierce resistance from start of this year. With USDCAD now below 1.02 there will be some longer term names who were very much on the short CAD story stinging, on the day expect corp demand to emerge around 1.0150 but could be more position unwind to come, for now buy it back to 1.015 though. NZDUSD remains above 0.8350 with EURNZD on the blink, few offers in book around 0.8400 have to say my desire to fade AUDUSD once stops are taken out above 1.0500 stronger than any view in the bird for now.
Scandies – Position related squeeze early on yesterday in EURSEK between 8.42 and 8.4550 on very thin liquidity before the safe haven type price action resumed and EURSEK actually went back to 8.38 and EURNOK sold off from 7.55 to 7.51 on similar type of sentiment. Last summers price action particularly in EURSEK shows that this certainly is the way to play EURscandies over the course of European uncertainty and crisis therefore if the sell off in EURUSD continues expect EURSEK to be back testing 8.28/30 initially which should be good support and EURNOK testing 7.48/49. Really being ultra critical if you are short EURSEK would be nice to have your stop above yesterdays high therefore would rather be leaving offers around 8.42 as opposed to giving bids where we open this morning around 8.38. EURSEK support: 8.30 8.28 8.10 resistance: 8.42 8.46 8.50. EURNOK support: 7.48 7.38 7.34 resistance: 7.56 7.60 7.65.
Barclays